THE
MONEY ISSUE MAY BE THE ESTABLISHMENT'S ACHILLES' HEEL IN ITS WAR ON
"ISLAMIC FUNDAMENTALISM"PART 3 of 7

Dr.
Edwin Vieira, Jr., Ph.D., J.D.
January 11, 2006
NewsWithViews.com

PART
TWO of this Commentary explained that America does not have constitutional
money and banking because the Establishment wants the very opposite.
In this regard...

(3)
Emphasis on inflation--expansion of the supply of legal-tender fiat
currency and credit--cannot be exaggerated. Because, being in principle
a Ponzi scheme, the pyramid of fractional-reserve banking must continue
to swell in base and height, or implode upon itself. The ballooning
pyramid, however, stands precariously upside down, on the relatively
tiny apex of the real economy, which is forced to support an ever-expanding
load of insufficiently productive, or actually unproductive and eventually
destructive, debt and speculation. (The swelling "derivatives markets"
stand out as egregious examples of this "casino capitalism".) Thus,
the socio-economic structure becomes increasingly top-heavy, unstable,
and dysfunctional, subject to recurrent crises, and even self-cannibalistic:
racing with accelerating celerity towards its own demise in hyperinflation,
depression, or the one followed by the other. And with either result
creating social chaos that will culminate more likely than not in
a police state--and another politically orchestrated hunt for scapegoats,
to turn common people's wrath away from the real culprits.

To
these long-term effects, though, politicians and special-interest
groups typically pay no heed. Together, the shortness of human sight
and the brevity of human life are the bane of all social stability.
Precisely because the acaparadores--the political looters--are
mortal, but society is (relatively speaking) immortal, political looting
is a paying proposition. If the fatal consequences of their misguided
policies inevitably fell on the special-interest groups that promoted
them, and on the politicians who enacted them, prudence (or plain
fear) would effectively deter most dangerous legislation. Inasmuch,
however, as one generation of public officials and their clients can
often benefit immediately from some perverse policy, while leaving
the next generation of taxpayers and manipulated voters to suffer
its inevitable ill effects, then avarice, ambition, and the lust for
power will always come to the fore. As long as the political present
is a "free rider" on the economic future, politicians and special-interest
groups today will always seek to feather their own nests at the expense
of other people who live in a distant tomorrow. This is one reason
why a firm belief in an immortal afterlife of sure and certain rewards
and punishments is so important to society; and why aggressive atheism
and agnosticism--especially when officially imposed or promoted--are
so destructively antisocial, but so personally profitable to predatory
politicians and special interests.

As
to money and banking, modern politicians' only concern during their
tenures is to maintain the Ponzi pyramid of fiat currency and credit
in some semblance of precarious balance--notwithstanding that the
illusion of temporary stability allows for continuing and even exacerbating
the very real malfunctions of the system that, carried far enough,
must result in its self-demolition, and with it society's economic
and political disintegration. The longer the system continues to "work",
the deeper the grave it digs for society. The Establishment's notion
that it "controls" America's monetary and banking systems is, therefore,
fundamentally delusive and fatally dangerous. At this point in the
inevitably calamitous cycle of fractional-reserve central banking
and fiat currency, the Establishment no more "controls" those systems
than the lady from Niger who rides on the back of a tiger in the children's
nursery rhyme dominates the beast. But, just as she, the Establishment
cannot afford to ease its white-knuckled grip on the reins.

c.
This sorry situation does not continue because the American people
themselves can do nothing about it. No, indeed.

(1)
Many champions of the free market say that Americans cannot have constitutional
money and banking because of the present legal-tender statute: Title
31, United States Code, Section 5103. They contend that it is first
necessary to repeal this statute if Americans are to make any headway
against the Establishment's regime of phony rag currency, slug coinage,
and Ponzified central banking. This idea is dead wrong.

Americans
even now have the rights:

to
make so-called "gold-clause contracts" under Title 31, United
States Code, Section 5118(d)(2)--and thereby to avoid the legal-tender
law altogether; and

specifically
to enforce such contracts through private arbitration--and thereby
largely to stay out of the General Government's and the States'
kangaroo courts.

Thus,
the legal-tender statute is no legal barrier to any individual who
wants and knows how to circumvent it, and is willing to bear the rather
high economic costs of doing so. And in a society of intelligent and
patriotic people the legal-tender statute would prove to be no great
economic barrier, either, because the economic burden of avoiding
it would decrease in direct proportion to the number of people who
took such action. So, believing that the legal-tender statute is always
an insurmountable hurdle serves only to confirm people in an ill-advised
resignation to the status quo.

(2)
Other advocates of sound money excuse Americans' inaction on the grounds
that any major reform must await an initiative from Congress, to which
the Constitution delegates the power "[t]o coin Money, [and] regulate
the Value thereof", in Article I, Section 8, Clause 5. This, also,
is erroneous. In Article I, Section 10, Clause 1, the Constitution
denies to every State the power to "make any Thing but gold and silver
Coin a Tender in Payment of Debts"--thus, in that "but", plainly reserving
to each State the power to make such coin "a Tender" within her jurisdiction.
And surely with respect to the performance of their sovereign governmental
functions of taxation, public spending, borrowing, taking of private
property for true "public use" through eminent domain, and adjudications
in their courts, all of the States can choose to employ gold and silver
as their media of exchange to the exclusion of Federal Reserve Notes,
bank deposits, or any other currency.[1]
For this result, no Congressional action is necessary.

d.
The plain fact is that America does not have constitutional money
and banking because the majority of Americans apparently does not
know enough to want them, or does not want them enough to demand them.
Ignorance and disinterest, of course, must be the reasons in the representative
Republic which, subject to pervasive manipulation or not, America
still remains as a matter of law. But why is this so?

(1)
A large number of Americans actively or passively sides with the Establishment.
These Americans are disinterested in constitutional money and banking
because they have (or think they have) personal pecuniary interests
in unconstitutional money and banking. After all, redistribution of
wealth requires not only redistributors, but also recipients of the
wealth redistributed. (Ironically, though, many of these recipients
are as much the victims of the system as they are its beneficiaries.
For example, impoverished people already, or soon to become, utterly
dependent on the collapsing Social Security and Medicare schemes.)

(2)
Most Americans are woefully ignorant of their legal rights and economic
options as to "gold-clause contracts". And most of those who have
informed themselves about these matters shrink from employing such
contracts because of the costs of using silver and gold as their media
of exchange, including: (i) education costs of the parties to the
contracts, their lawyers, their accountants, and so on; (ii) transaction
costs of drafting the contracts, and of obtaining, transferring, and
storing the gold and silver coins specified as media of payment; and
(iii) such regulatory costs as determining how these transactions
will be taxed, especially as to "capital gains and losses", when their
values are stipulated in silver and gold, not paper currency. For
these reasons, silver and gold coin will not effectively compete with
irredeemable paper currency as media of exchange in the marketplace
until either:

large
numbers of Americans become willing to absorb the costs necessary
to start such a parallel coinage system; or

a
"large player"--such as a government or a major private producer
or retailer--comes into the market to lower the costs for everyone;
or

Americans
become aware of how such technological advances as private electronic
gold currency can greatly simplify the use of specie; or

governments
significantly reduce the regulatory costs associated with the
use of gold and silver as common media of exchange; or

the
long-term costs of continuing to employ fiat currency become widely
apparent and intolerable; or �some combination of these alternatives
supervenes.

(3)
Finally, Americans' political leadership in the States is to a woefully
large degree clueless, visionless, and feckless. Typically, if they
consider the subject at all, State legislators supinely defer to Washington,
D.C., on monetary policy, with no concern either that the General
Government's decisions are endangering the economic security of their
own States, or that their mindlessly robotic reliance on those decisions
mocks this country's federal structure, destroys one of the major
checks and balances in the constitutional system, and encourages hubris,
irresponsibility, imprudence, and arbitrary exercises of power by
the Federal Reserve System and the special interests it serves. So,
although (as I have explained in earlier Commentaries) initial reform
of the monetary system could begin in the States--and that is probably
the only workable route to a peaceable solution--such reform will
require very hard slogging.[2]

B.
To be sure, another possibility for triggering reform could be a crisis
which forces the issue. But what sort of crisis might that be?

1.
It cannot be simply a domestic crisis. A purely domestic crisis would
likely not be bring about an orderly and measured transition in the
direction of constitutional money and banking--primarily because the
Establishment, desperate to defend its own position, and with many
of the high cards of power already in its hand, could and would thwart
any change for the better.

In
any domestic monetary and banking crisis, Americans could expect not
only economic stringencies; uncertainty, confusion, and fear engendered
by ignorance; mass hysteria whipped up by the big media; and strident
political demagoguery--but also total centralization in Washington,
D.C., of control over money, banking, finance, and the stock and commodities
exchanges, through an industrial-strength Caesarism that would make
Franklin Delano Roosevelt look like Thomas Jefferson. The result being
that the Establishment would suppress the use of silver and gold as
media of exchange (or even stores of value) in the open markets, and
probably would be applauded by a populace that knew no better and
cared less. (What would occur in the black markets, though, would
likely be something else altogether.)

Even
without inventing any novel "emergency powers", the Establishment,
on the basis of existing statutes, regulations, and judicial precedents
which could be twisted to rationalize new statutes or regulations,
might easily:

require
reporting of all transactions involving money or media of exchange
other than legal-tender paper currency or bank deposits;

impose
confiscatory taxes on all transactions involving silver and gold;

declare
"gold-clause contracts" unenforceable in the courts, or illegal
altogether;

confiscate
gold and silver coin and bullion from private owners;

outlaw
the mere possession of gold or silver in any form, without some
"license" or other special governmental permission; and, overall,

establish
a pervasive and thoroughgoing financial police state of surveillance,
regimentation, confiscation, and prohibition aimed at "demonetizing"
gold and silver.

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That
none of these measures would be constitutional would not deter the
Establishment, just as the unconstitutionality of similar actions
proved no barrier in the past. So, a domestic crisis would be unlikely
to generate significant impetus for change in a constitutional direction,
but would probably serve merely as the occasion and excuse for the
Establishment to demolish what little remains of Americans' constitutional
freedom in the area of money and banking.

Edwin Vieira, Jr., holds four degrees from Harvard:
A.B. (Harvard College), A.M. and Ph.D. (Harvard Graduate School of Arts
and Sciences), and J.D. (Harvard Law School).

For more than thirty years he has
practiced law, with emphasis on constitutional issues. In the Supreme
Court of the United States he successfully argued or briefed the cases
leading to the landmark decisions Abood v. Detroit Board of Education,
Chicago Teachers Union v. Hudson, and Communications Workers of America
v. Beck, which established constitutional and statutory limitations on
the uses to which labor unions, in both the private and the public sectors,
may apply fees extracted from nonunion workers as a condition of their
employment.

He has written numerous monographs
and articles in scholarly journals, and lectured throughout the county.
His most recent work on money and banking is the two-volume Pieces
of Eight: The Monetary Powers and Disabilities of the United States
Constitution (2002), the most comprehensive study in existence of American
monetary law and history viewed from a constitutional perspective. www.piecesofeight.us

He is also the co-author (under
a nom de plume) of the political novel CRA$HMAKER:
A Federal Affaire (2000), a not-so-fictional story of an engineered crash
of the Federal Reserve System, and the political upheaval it causes. www.crashmaker.com

In
any domestic monetary and banking crisis, Americans could expect not only
economic stringencies; uncertainty, confusion, and fear engendered by
ignorance; mass hysteria whipped up by the big media;...